Automobile Business News Startups

Ola served a show-cause notice for violating cab aggregator rules and re-introducing surge pricing

ola
Share on Facebook
Tweet about this on TwitterShare on Google+Share on StumbleUponShare on LinkedInPin on PinterestShare on Reddit

It is taking an eternity for cab-hailing services to find a way to operate in the state of Karnataka, amid stubborn, regressive govt. functioning. Just a month after receiving the aggregator licence to operate freely in the state of Karnataka, Ola re-introduced surge pricing on its platform. The result ? A show-cause notice from the Government.

According to fresh regulations laid out by the government, cab-hailing services are not allowed to charge any peak charges on their trips. Thus, the Transport Department has issued a show-cause notice to Ola, asking it the reasoning behind violation of licensing terms and the re-introduction of surge pricing and shuttle services in the city. Hey Gov., they are here to do business! Just in case you missed that.

In the notice served by the Transport Department, it mentions that it has received user complaints saying that Ola Cabs is again collecting surge charges as well as offering shuttle services in the city of Bengaluru. Issued last week, the notice seeks reply from the company within a week’s time.

In the revised version of peak pricing introduced recently, Ola has again taken cues from Uber and started presenting the commuters with the revised tariff per kilometer. Previously, the cab aggregator would show an ‘upwards arrow’ demarking the multiple of the normal fare(surge pricing) that is applicable on that ride.

The notice sent to Ola also sheds light on the fact that the cab aggregator has been using maxi cabs of 12+1 seating capacity to offer ‘shuttle services’ in Bengaluru. But the transport officials believe that this service is in direct violation of not only the new aggregator norms but also Karnataka’s transport norms. It says that the city transport system has been nationalised and only the Bengaluru Metropolitan Transport Corporation (BMTC) is allowed to ferry intra-city commuters. And we all were hailing Bangalore as the ‘Silicon Valley’. Like seriously ?

Talking on the matter, Additional commissioner of transport HG Kumar told ET that,

Ola cabs shouldn’t exceed the fare cap of Rs 19.50 per km for AC cabs and Rs 14.50 per km for non-AC cabs.

During the process of licensing, Ola had given an undertaking promising not to exceed the aforementioned price cap. But, the cab aggregator has turned a blind eye to the norms, even after receiving much praise from the government.

However, this recent development would surprise the rival cab aggregator Uber, who’s been going back and forth to receive the operating licence from the Karnataka government. This will give them an obvious reason to rebuke Ola, who(along with Meru Cabs) has recently been pointing fingers at the former for not sticking to the rules set down in the country.


A hands-on guy fascinated by new apps, technologies and enterprise products.

[email protected]


Add Comment

Click here to post a comment

Your email address will not be published. Required fields are marked *